With billions of wireless users in hand, mobile communications companies must now determine not only how to improve retention rates, but also how to maximize the value of these subscribers. Teradata, a division of NCR Corporation, has introduced Teradata Profitability Analytics software, which runs on the Teradata warehouse engine. Comprised of Teradata Value Analyzer, which precisely measures current profitability and Teradata Lifetime Value, which predicts lifetime profitability, Teradata Profitability Analytics enables mobile communications companies to develop customer relationship management (CRM) strategies with value as the foundation.
There is a critical need for profitability analytics, according to Yankee Group’s David Hawley: "Recent Yankee Group research has indicated that the current economic and competitive environment is forcing wire-line and wireless communication service providers (CSPs) to better understand the profitability of their service customers and sales channels. CSPs are prioritizing business intelligence investments that will enable them to increase their understanding of the profitability of customers as well as products and services over other technology initiatives."
"In what has felt like a parallel to Bill Gates' vision for a computer on every desktop and in every home, mobile communications companies have led the charge for a wireless phone in every hand," said Jack Knapp, vice president of communications industry marketing at Teradata. "But as penetration rates begin to peak, many of these companies are shifting their focus to retaining customers and encouraging higher spending to drive revenue growth. In doing so, they need to determine not only which customers are likely to spend more money, but which customers are more valuable to retain.
Teradata Value Analyzer is an end-to-end solution that pinpoints profitability calculations across five distinct components at the fundamental level, the billing telephone number. These components are: revenue (direct and indirect), interest revenue/expense, direct expense (applied to customer behavior or events), indirect expense (cost of doing business) and risk provision (applying the cost of credit and other potential risks and fraud). To boost speed, Value Analyzer calculations are completed inside the Teradata warehouse engine, rather than consuming time by moving large amounts of data in and out of the data warehouse as it is processed. This also heightens accuracy as Teradata allows for an exhaustive review of all data, not just a sample that may offer misleading clues to customer profitability and behavior.
Mobile communications companies can utilize Teradata Value Analyzer to proactively manage their business by tracking profitability by customer segment, rate plan, channel and geographic market. Decisions on investments in new applications, products and services, network expansion and phased service rollouts can be prioritized. Teradata Value Analyzer can also provide analyses that help companies build more profitable rate-plan offers and better target customers for rate-plan migrations. Customers can be segmented by behavioral profitability as opposed to revenue and marketing campaigns can be designed to change the overall account mix, capitalizing on the attributes that characterize higher-margin customers.
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